Connect

My weekly technology law column (Toronto Star version, homepage version) takes a look back at last week's CRTC broadcast policy decision and report on the consumer impact. The piece covers much the same terrain as two blog posts on the same issue. I note that after months of intense lobbying and marketing that pitted broadcasters ("Local TV Matters") against cable and satellite companies ("Stop the TV Tax"), the Canadian Radio-television and Telecommunications Commission weighed in last week with its much-anticipated broadcasting regulatory policy decision.

Broadcasters were generally viewed as the short-term winners, since the CRTC opened the door to negotiations on a new fee for local television signals, subject to a court ruling confirming the Commission's jurisdiction to implement such an approach. That left some very unhappy – cable and satellite companies warned of increased costs, while the CBC lamented that it was a "dark day" for public broadcasters after it was excluded from the proposed negotiating process.

Two perspectives were largely missing from the decision, however. The consumer impact was left to a second report, released the following day, in which the commission admitted that prices would go up, but maintained Canadians would continue to pay based on past experience of steady price increases imposed by cable and satellite companies. That conclusion prompted a stinging minority report from Commissioner Michel Morin, who argued the CRTC was defending "the interests of the industry to the detriment of consumers who, for their part, remain powerless."

The second missing perspective was the failure to account for the emergence of the Internet as a significant delivery channel for broadcast content. Indeed, it seemed appropriate that on the day the CRTC released its decision, a new study was published that found Canadians now spend more time online than watching television.

While the world is increasingly moving online, the CRTC decision acted as if the Internet scarcely exists. It mentioned the Internet only once, acknowledging that it is a platform for content distribution. Moreover, the report did not include any references to streaming, YouTube, podcasts, BitTorrent, or peer-to-peer (the technology used in 2008 by the CBC to distribute its content).

The reality of how consumers access broadcast content was surely worth considering in the context of a broadcast policy that envisions the possibility of blocking U.S. broadcasts of television shows where a Canadian broadcaster has purchased local rights to the program and failed to negotiate a fee with a cable or satellite company. In other words, if the Canadian broadcaster chooses to negotiate for a new fee but fails to reach a deal, it will have the right to mandate blocking broadcast of programs from both local and foreign sources.

That could result in millions of Canadians regularly encountering blank screens instead of expected programs. Given the increasing expectation of on-demand program viewing, the policy would harm both broadcasters and broadcast distributors, sending more Canadians away from broadcast television to the Internet where there are no blackout messages and most programs are readily available in both legal and illegal forms.

This may be precisely what the CRTC is counting on, hoping the blackout option is so unpalatable to both parties that it will force them to reach a deal. Consumers may not be inclined to wait around for this particular fight to be resolved, however.

Given that they now spend more time online than watching television, the programs are readily available online, and U.S. over-the-air digital signals are freely accessible to a sizable percentage of the Canadian population, basing a broadcast policy that presumes consumers will continue to pay escalating fees and be willing to settle on forced program scarcity in a world of abundance hardly seems like a recipe for success.

Related posts:

Share this post

6 Comments

Your analysis in this article criticizes the decision for failing to see the implications of a society which is gravitating online, while at the same time making a similar oversight. You fail to acknowledge and account for the fact that the cable operators are also the internet service providers. They are engaging in throttling and capping practices which directly impede the consumers ability to watch whatever they want, whenever they want on the internet. Because of market concentration across platforms, the consumer will indeed have to suck up increased fees – wherever they choose to turn.

Yep.Like Cory said, it’s win-win for these companies. They can gouge their cable customers and then recoup it all up in the internet they also offer. The current state of affairs is utterly absurd and should never have been permitted in the first place. Rules need to be laid down and enforced.

Meanwhile, I will continue to download my episodes online until broadcasters can offer me a package that is both as convenient and reasonably priced. So far I’ve seen neither.

The cable companies, broadcasters and the CRTC need to shake there head, if they dont think this will be the straw that broke the camels back for many people, they will soon find out. They can all share a percentage of the $0.00 ill be paying them.

RE: Cory“You fail to acknowledge and account for the fact that the cable operators are also the internet service providers.”

It also fails to acknowledge that a large amount of the broadcasters are owned or affiliated with cable/satellite operators (Bell and CTVglobemedia, Rogers and its TV stations, Shaw and Canwest, etc). This situation is indeed very VERY screwed up.

“…the CRTC decision acted as if the Internet scarcely exists…”
That’s because the problem is that the CRTC does not UNDERSTAND the internet. The CRTC simply does what their friends at Bell tell them. All you have to do is read the transcript of Jesse Brown’s October 2009 interview of CRTC Chairman Konrad von Finckenstein:

“… the report did not include any references to streaming, YouTube, podcasts, BitTorrent, or peer-to-peer …”

Maybe because it’s difficult to talk about things you don’t understand. There is a reasonable possibility that Chairman von Finckenstein doesn’t even know what most of those things are.

The problem would be the fact that the CRTC doesn’t seem to have a problem with making rulings about things they don’t understand. They just seem to make the rulings that their friends tell them to. I’m certain you could find a better qualified panel of high school students to perform a better job of regulating these industries.

And as Cory, Anonymous, and Eric L. all discussed before me, these corporate interests are all intertwined. Isn’t this situation what they’d call “anti-trust” south of the border?

“In broadcasting, the CRTC ensures that all Canadians have access to a wide variety of high-quality Canadian programming as well as access to employment opportunities in the broadcasting system. Programming in the Canadian broadcasting system should reflect Canadian creativity and talent, our bilingual nature, our multicultural diversity and the special place of aboriginal peoples in our society.” Unfortunately nothing about protecting the consumer. Simply encouraging competition (in another paragraph).